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TMI Blog2009 (3) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... tion laid down u/s. 80IB(2)(iii) of the Act?" [C] "Whether on the facts and circumstances of the case and in law was the Appellate Tribunal right in holding that assessee is engaged in manufacturing article or thing when one of the member dissented and decision is taken on the basis of opinion of majority?" 2. The Assessment Year in question is 2001-2002. Though, this appeal has not been admitted, at the request of learned counsel for the contesting parties this appeal has been heard along with group of Tax Appeals, being Tax Appeal No. 532 of 2008 and cognate matters, as according to learned counsel for appellant revenue, the issue involved is identical in terms. 3. The matters have therefore been heard at length. After hearing the learned counsel for the parties, the Court is of the opinion that no substantial question of law is involved, the only dispute between the parties being as to whether respondent assessee manufactures a product known as 'Transformer Core' or not. According to revenue, there is no manufacturing activity involved, while according to assessee the activity in question amounts to manufacture. 4. The assessee, is engaged in the business of making transform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstituted the Bench originally, was only on the question as to whether on facts, the activity of the assessee amounted to manufacture of an article or a thing or not. The learned counsel also placed reliance on various decisions of the Apex Court and this High Court to point out that the tests formulated by the said decisions have been applied by the Tribunal while recording the majority opinion. 9. There is no dispute on facts, in as much as it is an accepted position between the parties that the assessee Company is engaged in making CRGO Core Lamination or Transformer Core, a vital component of various kinds and types of transformers used in power distribution. As already noted, the Core Lamination is made by using the raw material known as CRGO/CRNO. The majority has recorded the following processes as being involved in making of Core Lamination after purchasing CRGO/CRNO coils and/or sheets. I. SLITTING : Slitting process a high precision computerized constitutes the first important manufacturing activity and fundamental in order to obtain the final product. The quality and accuracy of the process, largely determines the quality of the final product. The slitting is done on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and processing which affects its quality. Annealing process is down as per the mill's specification at a temperature of 820' for 72 to 90 seconds depending upon the thickness and grade of material. This process of annealing is to restore and improve the magnetic and electrical properties of lamination. VI-TESTING OF LAMINATION : After annealing, the laminations are physically inspected for technical details. They are verified to ensure that they are as per customer's drawings and specifications. Key aspects like length, width, thickness, mitering, holing, notching and physical appearances are verified and examined during this process. The verification is done by experienced and skilled quality executives. To certify and verify that the annealing process has restored or improved the magnetic and electrical properties of the lamination, a test is conducted. The Franklin power supply unit measures the surface insulation of the lamination and the Epstein tester iron loss tester measures the core/iron loss in the lamination. The quality and technical staff ensures that the lamination is as per its technical details. Certificates are prepared and issued by quality department as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Pyramid style of packing the laminations which is advantageous during core assembly. 10. Admittedly, the majority opinion has recorded that the aforesaid activities in cases of some assessees are without the process of annealing but the said fact by itself does not make any difference. The majority opinion, as expressed by the Third Member, in his order, reads as under: ".... Looking to these facts, there cannot be two opinions that the shape of lamination has undergone a complete change after performing various processes. I also find that there was no dispute that the raw material from which the core is made is called CRGO coils whereas the item which has emerged after various processes is called transformer core. It is also undisputed position that the CRGO coils even with few processes cannot be used in a transformer unless all the processes were complete. It is the transformer core only which is end product which could be used in the manufacturing of transformer. Thus there cannot be any dispute that due to various processes the product has distinct name, shape and uses. By these processes the raw material loses its identity and new product comes into existence which is com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the aforesaid findings of facts recorded by majority of the members of the Tribunal, the Court is of the opinion that it cannot be said that any substantial question of law is involved. Whether a particular activity amounts to manufacture or not would always be a question dependent upon the facts and evidence on record and would be based on the facts of each case. The only issue which would call for an inquiry is as to whether correct tests have been applied after finding the facts on record. The tests to ascertain whether an activity amounts to manufacture or production of an article or thing have been laid down and reiterated by various decisions of the Apex Court and this High Court. Broadly, the requirement is that the raw material must be, in the first instance, subjected to a process of such a nature that it cannot be termed to be the same as the end-product after the raw material undergoes the process of manufacture. In other words, the goods purchased as raw material should go in as inputs in the process of manufacture and the result must be manufacture of other goods. The article produced must be regarded by the trade as a new and distinct article having an identity of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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